The alleged wrong working practice of the Mahanadi Coalfields Limited (MCL) in contravention to the Coal India Limited (CIL) policy has led the MCL suffer huge loss.
Various companies having long-term linkage quota with the MCL has stopped taking coal under the contract and started procuring coal in other auctions having less reserve price with no premium. The MCL is supporting such companies by issuing short term auctions with huge quantity offering where coal will be sold with no premium. This violation can be verified with exclusive auction and spot auction scheduled for October 8 and 9, respectively.
While exclusive auction was scheduled to be held for 52 lakh MT by road mode and 60 lakh MT (1500 rake) by rail mode (total 112 Lakh MT), spot auction will be held 54.15 lakh MT by road mode and 52 lakh MT (1300 rake) by rail mode, totaling 106.15 lakh MT.Such huge quantity offered would go with zero premium and cause huge loss to MCL.
Now questions arise as to why companies are not taking long term procured quota coal almost from January 2020 onwards and why the MCL is not taking any action on this? Why such huge quantities of coal is being offered and if the MCL has stock to cater to such big supplies?Also, a question arises as to why reserve price is kept as notified price in the month of October 2020 auctions?While various consumers have surrendered the long term quantity contracts, the MCL has not taken any interest to review such losses.
While a market intelligence study reveals that the MCL has taken interest for selling of such huge quantities 218 lakh MT, it is not understood if it has been made to give benefits to certain industry.
In view of these facts, many are of the view that companies are over powering MCL working and getting benefits on low pricing and Zero premium coal. It is alleged that CMD and GM (M&S) are taking undue advantage of their positions and causing losses to CIL.